Mexican auto supplier Nemak said Thursday that its revenue and net income were slashed in the fourth quarter, largely as a result of the UAW strike at General Motors.
The powertrain and body structure components supplier said that total revenue for the quarter was down 13 percent to $941 million.
Net income fell 18 percent to $31 million, and fourth-quarter earnings before interest, taxes and other adjustments dropped 22 percent to $133 million, the company said in a statement.
Nemak rapidly faced challenges in North America at the end of last year as a result of the strike, which extended from the latter part of the third quarter into the fourth.
In the fourth quarter in North America, revenue was down 19 percent and EBITDA declined by 26 percent, Nemak reported.
The company said lower volumes in North America were a result of "the impact of the General Motors strike in the U.S., the phase-out of production of certain light-vehicle models among Detroit 3 customers throughout the region and a reduction in the company's shipments to China," the company said in the statement.
The fourth quarter in Europe saw a revenue decrease of 13 percent , and EBITDA declined by 16 percent, mainly on lower volume, the impact of the depreciations of the euro against the U.S. dollar and lower aluminum prices, the company said.
Revenue and EBITDA in the fourth quarter for the rest of the company's markets increased by $26 million and $9 million, respectively, reflecting more favorable product mixes elsewhere.
CEO Armando Tamez said in a statement that in the fourth quarter, the company won new contracts worth approximately $360 million in annual revenue across its product lines, bringing the total value of business for 2019 to just more than $1 billion.
For the full year, the company won contracts worth about $280 million to supply structural and electric vehicle components.
"In 2020, we anticipate that evolving industry and macroeconomic conditions may continue to generate volatility in the markets we serve," Tamez said. "To address such risks, we will remain focused on optimizing costs and maintaining discipline in capital allocation through increased reuse of existing assets, while at the same time tapping into higher value-added opportunities linked to accelerating lightweighting and electrification trends in our industry."
For the full year, revenue decreased 15 percent to $4.02 billion.
Net income dropped 28 percent to $130 million, and earnings before interest, taxes and other adjustments fell 15 percent to $621 million.
Nemak shares fell 1.08 percent to $7.36 in Thursday morning trading.
Nemak, of Garcia, Mexico, ranked No. 52 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $4.7 billion in its 2018 fiscal year.
